Bitcoin and Ethereum remain in corrective phases following their prior advances. The key question is whether sufficient contraction and accumulation have occurred to support another sustained advance. At present, neither market appears to have completed that process.
Bitcoin
Bitcoin appears to require further contraction before a durable base can form for another bull move.
The most important characteristic missing at present is sufficient contraction. Markets that have experienced major advances typically require time to digest those gains before another sustained move higher can develop. At this point, Bitcoin does not appear to have completed that process.
It is generally not desirable to be early in markets undergoing this type of correction. A better approach is to allow the market to settle, contract, and demonstrate renewed strength. Ideally, this would take the form of a positive month showing ease of movement to the upside.
At present, rally attempts continue to labor. The market is expending too much effort for too little progress. This suggests insufficient strength and insufficient accumulation at this stage of the correction.
Ethereum
Ethereum remains weaker than Bitcoin and is exhibiting many of the same negative characteristics.
Recent rally attempts have been laboring. Volume has been relatively high while upside progress has been limited. This type of behavior often reflects supply rather than accumulation.
The May vertical bar closed below the midpoint of the four-month trading range. That is not the type of action typically associated with a market preparing for an immediate advance.
Current implications remain for a move toward 1,000, near the lower boundary of the six-year trading range.
The material presented is for informational and educational purposes only and should not be construed as investment advice.